From Businesses, a Flood of Aid

September 06, 2005

By Jessi Hempel and Bremen Leak At Louisiana State University in Baton Rouge, local, state, and federal officials coordinate relief efforts using 100 Thinkpad computers -- donated by IBM (IBM). In New Orleans, Office Depot (ODP) has offered city officials any of the products in five of its stores to help get the city up and running. Plus, it has furnished area students with 1,000 supply-stocked backpacks. Outside the Astrodome in Houston, Abbott Laboratories (ABT) is providing diagnostic equipment and testing services from 80-foot-long semi-trailers, or "labs on wheels," to diagnose dehydration and bacterial infection.

Against the backdrop of a government relief effort criticized for being ham-handed and slow, corporations are mobilizing quickly to provide substantial cash donations as well as strategic gifts of their products and services. "Companies can really do things that government can't because they're more mobile [and] quicker," says Bradley Googins, executive director of The Center for Corporate Citizenship at Boston College.

Of the more than $500 million in donations that have flooded the Gulf Coast since Hurricane Katrina struck the region last week, companies and foundations have given or pledged $169 million, according to The Chronicle of Philanthropy. Of the $439.5 million that the Red Cross has received as of Sept. 6, 2005, $140 million has come from Corporate America.

REASONS TO GIVE. That's one in three philanthropic dollars, which is a larger percentage than the one in four philanthropic dollars given after the September 11 terrorist attacks. And the amount is rising by the hour, as companies scramble to respond to the region's escalating needs. "We're on track to surpass the tsunami [which struck Asian coastal areas last December] and 9/11," says Patrick Rooney, director of research at the Center on Philanthropy at Indiana University.

The sizable disaster response is a sharp spike from routine corporate giving, which made up just 4.8% all charitable donations last year. In part, says Indiana University's Rooney, corporations see an opportunity to burnish their reputations as good corporate citizens. Also, many companies are depending on a robust relief effort to restore their operations in the area. Regardless of the reason, corporate giving will have a sizeable role to play in rebuilding much of the hurricane-struck area.

Beyond simple cash donations, companies are making smart use of their products and services through in-kind donations. They're also connecting their employees to volunteer opportunities and leveraging their financial contributions to involve employees through matching-gift programs.

VARIED GIFTS. Many companies have extended the limits on their matching-gift programs. Companies such as Dell (DELL) are matching up to $1 million in employee gifts. The New York Times Co. (NYT) is offering a generous $1.50 for every employee dollar contribution. And some companies, like American Express (AXP) and New York Life Insurance, have dropped their limits on employee matches. American Express has put aside $500,000, but a spokesperson says, "If employees donate more, we'll match more."

Other companies have given employees permission to volunteer with aid organizations or as part of company relief teams offering specific skills. Cisco (CSCO) has sent 80 workers to volunteer with the Red Cross. Chevron (CVX) plans to open a tent city within a few miles of its Pascagoula, Miss., refinery to provide shelter and services for up to 1,500 refinery staff and their families whose homes were destroyed or severely damaged.

In-kind gifts have been as varied as the industries that contribute them. Banks have mobilized to forgive debt and mortgage payments. Technology companies are working overtime to set up systems for victims to communicate with loved ones. Supermarkets and food producers are providing Campbell's soup, Kellogg's Nutrigrain bars, and other foods at no charge to Second Harvest, a hunger-relief organization.

As the relief effort nears day 10, it's too early to tell what impact business will ultimately have in helping victims and rebuilding New Orleans. But with the ability to mobilize both people and dollars, corporate philanthropy is becoming a powerful force in the race to rebuild the Gulf Coast.

Hempel is a staff editor for BusinessWeek in New York. Leak is a New York-based reporter